Pros & Cons of Payment Apps

December 16, 2019 · 7 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Pros & Cons of Payment Apps

You know the drill: You’re out at dinner with friends and the restaurant doesn’t let you split the check. Someone offers to cover the bill but you don’t have cash on you to pay them back. Now what?

When you use a mobile payment app, you can send money directly from your phone, either to another person or even to a business. There are a number of apps to choose from, each with potential benefits and drawbacks.

The most obvious advantage of a mobile payment app is convenience. They’re typically designed so that, with just a few quick taps, you can transfer funds. No ATM withdrawal (which could come with fees), no need to pull out your credit card, no need to write a check, or perform any other financial machinations.

The reality can be a bit more complex—especially when you’re choosing the right app for yourself and setting it up. However, once you’re familiar with the app, actually using it can be fast and easy.

Some apps work on most phones but many require a smartphone that has near-field communication technology (NFC). NFC allows your phone to communicate the information needed to transfer funds to your intended recipient.

You’ll may have to connect your credit card or banking info through the mobile wallet supported by your phone or through the app itself. You’ll want to make sure that your bank accepts the platform you’ve chosen and, when you go shopping, verify that the business also accepts your mobile app of choice. When all that comes together, you can make a fast, convenient payment.

More About the Pros and Cons

Besides being fast and easy to use, you’ll likely be less dependent on cash—which can reduce the risk of theft. Plus, with these apps, your credit card number is not stored in your phone itself; it’s in the cloud. So even if someone with nefarious intentions gets your phone, they typically can’t get at your credit card information through the payment app.

Having said that, if someone steals your phone, they may be able to access the payment app and make purchases and transactions through it — which you’ll then have to track down and report to your financial institution to get them removed.

And the supposed convenience of a payment app can sometimes leave you in a tricky situation. Say your phone battery dies, or you’re having other tech problems — you won’t be able to pay for your purchase, which can be a hassle.

Additionally, not every business accepts payment apps. If you have a phone that doesn’t have NFC technology, then you’re limited in which apps you can use.

More about Security

When someone is new to mobile payment apps, or is still considering whether to use them, they may be concerned about data security. However, mobile apps may be more secure than using credit cards or cash. Your financial information is transmitted electronically using data encryption which can be difficult for hackers to decode.

As a caution, you may want to make sure you send the right amount of money to the recipient — and make sure you sent it to correct recipient, period! There may not be a way to get missent funds reimbursed through the mobile payment app, so you’d need to rely upon the good graces of whomever received your funds.

Choosing a Mobile Payment App

When making your choice, what are you looking for? Will you mostly transfer money to friends and/or family members? Will you mainly use it to shop? A little bit of both?

Consider researching fees you may be charged. Though mobile payment apps are typically free to use for certain transactions, there may be costs associated with other services, such as when you link a payment app to your credit card. If you want an app that can be used internationally, consider choosing one with that capability.

You may also want to consider the following: How much can you transfer with your app in a single transaction? Are there limits? How many transactions can you make in a day? How secure is the app?

It can help to get app recommendations from friends and family, learning about their experiences and what they like (or don’t like). Having said that, your needs are likely unique, so what works for Aunt Sally may not work for you.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!

P2P Transfers

Shorthand for peer-to-peer transfers, P2P transfers allow you to send money to friends and family. And, as an increasing number of people find this technology to be fast, easy, and convenient, more businesses are accepting them as a form of payment.

With P2P transfers, you can send money to someone through a linked account via an app or by logging in online. It’s typically linked to your bank account, so you may need to provide your routing number (a nine-digit number that identifies your bank) and your account number. You can find both of these numbers at the bottom of a check from your account.

Some P2P companies allow you to attach your account to a credit or debit card instead, but it may come with a fee. Traditionally, to send someone money (or to receive it), you’d both need to have access to the P2P service.

How P2P Transfers Work

Perhaps you and your brother are going in together on a special holiday gift for your parents and your brother is going to handle the shopping. You could simply send him the money through your P2P service or he could send you a request and you could send the money in response.

Your brother would be specifically identified—by his phone number, email address, or a screen name, for example—so you’d know you were sending the money to him.

You’d enter the amount of money you’d like to send, add a note, if desired or required, and click to send. Your service provider may require an extra step, perhaps for security purposes.

Sometimes, the transfer happens immediately. Other times, there may be a delay, from a matter of hours to a couple of days. Once your brother receives the funds, he can choose to transfer them to his bank account or let them hang out where they are.

The bank transfer may take a little while to take place, with the specifics depending upon the service. If your brother doesn’t transfer the funds you sent, then he can use them the next time he wants to send money to someone via P2P.

Benefits of P2P Transfers

These transfers usually take place quickly, depending upon your service. When funds are exchanged between friends and family, the transfers are often free.

There may, however, be fees for business transactions, for high volumes of transfers, for having your account connected to a credit card rather than a bank account, and so forth.

When using P2P transfers, you don’t need to withdraw money from an ATM, go to your bank branch to get money, write a check, or do anything other than send funds through your mobile device. Although many services require both parties to have an account with them, this is changing.

With a SoFi checking and savings account, you can use P2P to transfer funds; if the other person also has a SoFi Checking and Savings checking and savings account, the transfer is immediate.

Additionally, with SoFi Checking and Savings you can spend, save, and earn, all in one product. Plus, there are no account fees (subject to change) and high interest.

Interested in making payments and transfers easier? Learn about SoFi Checking and Savings and its P2P transfers and other benefits.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member
SoFi Securities LLC is an affiliate of SoFi Bank, N.A. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender